OUTSOURCING
Updated December 2006
This has become one of those issues which has gained prominence in the last year. The theme is linked to GLOBALISATION. It is often related to CALL CENTRES & ICT jobs. The basic idea is that jobs which used to be done in the UK (or other MEDCs) are now done in other locations. These are usually the least cost location.
CASE STUDIES / RECENT EXAMPLES
Dr. Marten's Shoes
Norwich Union
Dyson
HP Sauce (see below...)
Bangalore in India is becoming a centre for IT research and production. In terms of GLOBAL IT SERVICES, the top 10 as: IBM, HP and EDS as the top 3, all with over $20 billion of turnover each, but catching up fast are firms in India. Check out the BBC News' E-Business page regularly for more information on this area. Excellent WILL HUTTON article on outsourcing: "Why weep for our factories" ? - uses Dyson as a case study.
"When Asia can pay wages a twentieth of our own, we should stick to what we do best - knowledge and research"
As a result of that article, a letter was later included in the Observer (on 2nd January) from Michael Bassey, Emeritus Professor of Nottingham Trent University, who argued against some of the points made. He pointed out the absurdity of:
"The expectation that a whole entrepreneurial culture will keep 60 million of us in a state of ever-increasing affluence, while competing successfully with other 'developed' countries who are striving to do the same... look at the current products of the entrepreneurial culture. How many varieties of multi-coloured flashing-light Christmas decorations can be invented ? How many different ways of taking a cork out of a bottle ?"
A useful article was published in Geography Review in September 2000. Report by Alan Young...
"Footloose Services: The economic geography of telephone call centres"
Also now on Globalisation lesson-plan page....
HP SAUCE moving to the Netherlands - an example of 'outsaucing'...(thanks to the 4rthur blog for the pun, which is marvellous...)
Outsourcing is the transfer of manufacturing and services from one country to another, generally in order to make savings on costs. This has been a common feature of the last decade, which has seen the movement of many thousands of UK jobs to other locations.
HP Sauce - this is a British classic, and has been made in the West Midlands from the start, but recently, plans were announced to move production to the Netherlands.
An online petition has been started up, and this has some rather good resources: visit the BROWN SAUCE website to view these excellent resources.
Helen Nurton has sent me an excellent MYSTERY resource to go with this (Word document), and also a MOVIE which will presumably soon be available on Adam Lawson's GeographyattheMovies blog.
Check out the image gallery at the site, and also some other media including some HP songs and other materials.
OUTSOURCING: 30 DAYS - shown on More4
Morgan Spurlock programme follows one ICT worker who lost his job in America to a corporation in India. He had a highly paid white-collar job, but it was outsourced to the TATA corporation from Morgan Stanley. He stays with a rising middle-class family who work for American companies as programmers and in call centres.
3.5 million jobs are likely to be outsourced this decade to countries like India. There are many new jobs being created in cities like Bangalore.
Chris travels to India to see what it is really like !
lots of American firms obvious, and even McDonalds
10 years worth of growth and bringing in lots of money to the city, which is bringing population growth
lots of cows wandering in the streets, garbage in the streets
plenty of jobs available
One of Indian workers has the American name "Ron Rocks" and goes to SURLIN SOLUTIONS who recruit for call centres. He is offered a job at a call centre which he has to train for.
India has the third largest English population in the world after the USA and the UK.
Outsourcing is down to saving money (or is it ?). Indians feel that there is a lot of talent amongst the Indian programmers and they don't necessarily get the same profile, and that a lot of the reasons given for the job losses are myths.
Chris has to pass an exam to prove that he can talk with an American accent! He has a 2 hour commuting time to work, getting stuck behind an ox cart on the way...
Prime time in the call centres is 6pm - 3am because of the time difference, therefore there are night shifts which are the better paid jobs. Some people don't leave the office until 5am. This means that the family that he lives with has a strange routine, as workers are sometimes working at daytime and night-time in the same family.
Have started celebrating Christmas, even though they are Hindu, because their target audience celebrates Christmas and therefore has time off, and therefore they take time off work too....
There is strict security at the call centres.
Chris visits an American style mall, which is built for those who are earning money in the new jobs. He also experiences the problems of traffic and infrastructure, and the variations in housing quality. He visits a poor quality housing area and sees the lifestyle in the bustees where people have a paid job and still live in very cramped conditions. He also sees lots of children working and wandering the slums.
"How can I provide you with excellent service today ?"